Bank of Baroda share price target

Maintain BUY with a TP of Rs 185 (1.3x Mar-20 ABV of Rs 142). BOBs 1Q show rekindled our faith in its recovery story, ever so slightly. Though slippages (~Rs 47.3bn, 4.5% annu.) were relatively elevated, higher reductions (3x YoY) kept GNPAs under control. Lower provisioning (down ~18% YoY) and tight cost control (up merely 9% YoY) pushed net earnings to a 7-quarter high. The sustained uptick in margins (up 14bps QoQ to 2.65%) was heartening.

BOB reported a steady quarter with earnings of INR 5.3bn driven by healthy recoveries and lower slippages. Specific credit cost declined substantially to 1.8% (annualised), which was the lowest since 3QFY17. Fresh slippages declined to INR 28.6bn (2.8% annualised) and 85% came from the watchlist, which now stands at INR 86bn ( down -INR 14bn QoQ). Non-NPL stress (Watchlist + NFB exposures to NPLs) on BoB's loan book is now at 2.8%. Management remains upbeat on NPL recoveries, with recoveries on two large steel accounts expected to flow through in upcoming quarters. We remain constructive on BoB, given its strong stress recognition (PCR of ~60%), reduction in unprovided residual stress and strong incremental...

Maintain BUY with a TP of Rs 182 (1.3x Mar-20 ABV of Rs 140). Despite yet another setback, BOBs pedigreed leadership, its focus on quality growth and a relatively stronger B/S vs. peers (CRAR at 12.2%) keep us constructive. A strong asset quality pullback is likely as the accelerated recognition cycle abates (Slippages to fall from ~6% to 2% by FY20E). Clarity on the CEOs extension will be keenly awaited.

ICICI Securities Ltd | Retail Equity Research Higher slippages at | 12569 crore and thereby elevated credit cost at | 5768 crore, led to losses of | 3102 crore. Out of slippages, | 4274 crore was due to revised RBI norms. Majority of slippages came from corporate and MSME segment. Divergence came in at | 2918 crore Absolute GNPA rose ~13% QoQ to | 56480 crore with GNPA ratio at 12.26%, ~119 bps rise QoQ. Post recognition of stressed assets, the watchlist (including SMA accounts) was at | 10,039 crore. Sectoral...

ff Revamping of Home Loan portfolio has started paying off, which is evident from an impressive 48.2% YoY and 16.7% QoQ growth in loan portfolio in 4QFY18. Notably, the Bank is the first PSB to launch risk-based pricing on home loan with interest rate as low as 8.3%....

26 May 2018 Bank of Baroda (BoB) reported a loss of INR31b v/s a profit of INR1.6b in 4QFY17, led by elevated opex (gratuity provisions and depreciation on revaluation of fixed assets) and provisions. Elevated NPL provisions (6.8% credit costs annualized) were on account of high slippages (12.3% annualized). PPoP came in at INR26.7b (-11.7% YoY), led by low other income (down 14.2% YoY due to weak treasury income) and high opex (up 25.5% QoQ) due to a rise in depreciation expense and gratuity provisions. NII growth came in at 12% YoY on the back of 12% YoY loan growth and 34bp YoY expansion in NIM to 2.51%. Interest income reversal for the quarter was INR1.7b (INR5.9b for FY18), and interest on income tax refund came in at INR1.

Bank of Baroda (BoB) is an Indian state-owned International banking and financial services company headquartered in Vadodara. It is the second largest bank in India, next to State Bank of India. BoB also has international presence, with 107 branches/offices in 24 countries including 61 branches/offices of the bank, 38 branches of its 8 subsidiaries and 1 representative office in Thailand. The deposits...

Strong improvement on all major operating metrics clearly suggests that Bank's organisational transformation effort is yielding the desired outcome. Further, analysis of stressed assets clearly suggests that the Bank is approaching the end of recognition of stressed loan cycle, which along with higher PCR clearly indicates sharp moderation in credit cost from FY19 onwards. Recently-announced mega recapitalisation scheme is a long-term positive for the public sector banks in general. The Bank's new management is gradually reinstating confidence through major changes in operating structure, which may start yielding desired outcome. As we believe that improved outlook on asset quality and operating performance front augur...

Maintain BUY with a TP of Rs 198 (1.3x Dec-19 ABV of Rs 152). BOBs robust comeback was blemished by yet another one-off telecom a/c slipping in 3QFY18. However, double digit growth in successive qtrs (+14% YoY), NIM uptick (after adjusting for IT refund) and restricted opex increase led to a large beat (~32%) in PPOP. High provisioning (3.21% of avg loans) on chunky slippages (~Rs 56.3bn, ~5.7% ann.) kept net earnings under pressure (down ~69% QoQ). Better treasury gains and lower MTM provisions (vs. peers) were pleasantly surprising.

ICICI Securities Ltd | Retail Equity Research BoB reported a strong operational performance. Asset growth & margins improved further. PAT was lower due to higher provisioning Operating earnings grew 40.6% YoY to | 3650 crore. This was led by NII traction of 40% YoY to | 4394 crore Higher-than-expected provisions of | 3427 crore led to profits being lower at | 112 crore. PCR improved 85 bps QoQ to 68.03% Credit traction improved further and was at 14.1% YoY to | 399380...